How to Budget an Irregular Income - L Bee and the Moneytree
L Bee and the Moneytree

How to Budget an Irregular Income

Do you ever wonder how entrepreneurs manage to budget? I mean they have no idea what their income will look like from one month to the next. While I previously thought they were crazy, I recently made the switch and started freelancing full-time, making our family of two’s budget completely based on an irregular income (my husband is a salesman).

Guess what, guys? It’s really not that hard! Being the weirdo detailed control freak that I am, I tried to make things super complicated at first. But sometimes the best way IS the easy way and I wanted to share how we do it with all of you.

Tips for Budgeting an Irregular Income

Tips for Budgeting an Irregular Income



1. Budget based on your lowest income month. Use the lowest amount of money you bring in on any given month to create your budget. Not only will this ensure that you are never short — even during slow months — it will also make any money made above and beyond this amount a bonus!

We take the lowest possible amount we make and keep our bills lower than that. And that’s why we live in a studio without furniture.

2. Have a buffer. Keep an emergency fund as well as a checking account buffer. This will come in handy should you ever have unexpected expenses come up (spoiler alert: you will, everyone does) or if one month you dip below your lowest income month.

In addition to our $1,000 emergency fund, we also saved up an extra month of expenses in our bills account. So at the beginning of October, we will actually be covered for October and November.

3. Write down your debt/saving/spending goals. Any month that you exceed your lowest income month (which should be most) will leave you with excess cash. Make sure you know what to do with it! By prioritizing debts to pay off, savings, and/or things you need/want to purchase, you will know exactly what to do with that cash instead of blowing it like a coked up rock star. Have a game plan for it!

We currently have three lists: one with our debts listed in order of priority, one with things we want to save up for (FinCon13 and going home for Christmas), and one with the things we need want to buy. Knee-high cognac boots, anyone?

4.  Hustle your ass off! Having an irregular income means that YOU are in control of how much you make. Of course there are external factors, but you have more control than a typical employee. Work hard and smart to get your income up month after month. Setting goals is a great way to do this!

As competitive people, my husband and I do better with income and productivity goals in place. We work much harder to beat them!

Does your household live on irregular income? What tips do you have for others trying to budget an irregular income? Can someone give me the okay to buy knee-high cognac boots, please?


  • We have some irregular income, but we don’t live on it. I think the points you made were dead on for how to handle irregular income though. The biggest variable right now, if we were to live on an irregular income, would be how much we spend paying down my wife’s student loan debt.

    • Erin

      Yeah, we put most of our extra income towards our debts as well :).

  • We are about to switch to irregular income. It is a little scary, but we are excited! Definitely live on way less than you can. No one wants to be stressed out about possibly not being able to pay their bills.

    • Erin

      You’ll do great! We don’t make a ton of money, but we live on even less, so we don’t stress too much :).

  • Totally agree. My freelancing business pays the bills and my husbands small business is also giving us an irregular income. We do try to budget and not spend too much, while also having enough money to save. With some discipline and commitment, even an irregular income can work well.

    • Erin

      Yep, it’s pretty easy once you get the hang of it :). Nice job on the freelance biz, Dojo!

  • Our family lives on an irregular income whenever my father is without a job and all I can say is it’s hard and you really must know how to budget properly to be able to live through it.

    • Erin

      Thankfully we keep our expenses very low and can live on just my husband’s lowest income if push comes to shove!

  • I get asked that question all the time to be honest Lauren. You are right, Budget based on your lowest income month. It’s not rocket science but some people struggle to put numbers to paper but I find once it’s in place they realize just how easy it is. Like you mention using the lowest income coupled with an emergency savings is the smart way to go. We factor in our projected expenses as well and keep them in a separate bank account. Being detailed in my opinion is crucial and why I love that you are crazy that way.. ha! Have a good one Lauren.. keep smiling! CBB

    • Erin

      It’s really not so difficult! But I always have to try and make things complicated :).

  • What?! You’re budgeting?! Say it isn’t so!!! 😛

    Great tips, Erin and I especially agree with having a buffer. It’s nice to have that peace of mind.

    • Erin

      I’m trying, Erin! It’s always a work in progress :).

  • Good advice for those on an irregular income. My wife and I have always had regular incomes, so I don’t have any experience.

    • Erin

      Thanks, Bryce! I thought it would be a lot harder than budgeting regular income, but it’s really not too bad.

  • J$

    This is a great one 🙂 I’m often asked about irregular budgeting and haven’t been able to figure out an easy way to explain it. Until now! You hit it on the head with “Budget based on your lowest income month.” It def. is as simple when it all comes down to it!

    Looking forward to seeing you at FINCON 🙂

    • Erin

      Thanks, J$ :).

  • Exceptional tips; easy to follow and very practical.

    • Erin

      Glad you liked them, Lisa!

  • This is super tough for me because my lowest income month is $0. If I can collect unemployment, it’s $1000, which as you know in NYC, is basically not liveable. I’m working on making sure that doesn’t happen anymore though.

  • Keeping a budget for those with variable income is not easy but it is possible. I’ve always believed that there’s no single rule to keeping a budget. Whatever works best for you and helps you achieve your goals is the one you should keep.

Copyright © 2016 · All Rights Reserved · L Bee and the Money Tree